Los Osos CSD approves tentative settlement with General Manager Kathy Kivley

Embattled Los Osos Community Services District General Manager Kathy Kivley could soon be ending her employment with the district.

The Los Osos Community Services District’s Board of Directors unanimously approved a conditional settlement with Kivley in a closed session Thursday night. The terms of the conditional settlement related to her employment are confidential, district lawyer Michael Seitz wrote in an email.

“I can’t comment at all until the condition passes. I expect that this will occur within the next 10 days,” Seitz added.

The tentative settlement, if Kivley signs off, likely would end her employment with the district, according to a source with knowledge of the situation.

Kivley has faced questions about her job performance in recent months.

An independent audit of the district’s 2013-2014 fiscal year determined that proper district oversight was lacking. The audit found that bookkeeping entries were difficult to track, that Kivley changed many original entries, and that vacation and sick pay were inaccurately reported with at least two employees receiving overtime pay for work done during normal business hours.

San Luis Obispo County Auditor-Controller James Erb, whose authority includes monitoring county special district audit reports, sent a letter Oct. 7 to the Los Osos board that described the audit’s findings as being “of great concern.”

In October, the board hired a former San Luis Obispo police chief, Jim Gardiner, who conducts investigative work on personnel issues in the private and public sectors, to look into whether Kivley took unpermitted time off and used her work computer for personal activities.

Kivley also has been repeatedly criticized by a small, yet vocal, group of residents who often speak during public comment periods at district board meetings, saying she has shown a lack of transparency in her dealings with the public on district matters.

Kivley, who makes an annual salary of $99,000, was put on paid administrative leave last week and remains on leave, Seitz said.

Kivley didn’t respond to an email request for comment on the conditional settlement outlined by the board.

Kivley previously told The Tribune that her accounting changes, cited in the audit, were due to mistakes made in previous entries by past employees that had to be reversed or reclassified. Kivley was hired in 2013.

“As a result of the workload required, the accountant requested that the GM (Kivley) input the journal entries into the financial accounting software,” Kivley said in a previous email to The Tribune. “The accountant reviewed all the journal entries prior to being posted to the (ledger) and oversaw the posting of the entries.”

Kively has not responded to the allegations related to Gardiner’s investigation.

Gardiner said he couldn’t comment on the details of the investigation this week.

This story was originally published December 11, 2015 at 12:30 PM with the headline "Los Osos CSD approves tentative settlement with General Manager Kathy Kivley."